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Private equity hotel investments

Jörg Frehse (Managing Partner, nusuite GmbH & Co. KG, Nikolaistr. 15, 80802 Munich, Germany)

Tourism Review

ISSN: 1660-5373

Article publication date: 1 February 2007

1387

Abstract

The significance of private equity as a form of financing and investing has led to growing interest in the real estate economy over the past few years. Anglo‐American investors in particular are currently engaged in large‐scale real estate transactions and have now become the most important group of investors in the European hotel real estate market. However, for private equity funds, the high risk of investing in complex tourism and specialized real estate such as hotels is always coupled with an expectation of returns well above the market average. Yet actually achieving above market returns is not always accomplished. This paper therefore deals with the question of why some real estate private equity investors succeed in getting returns above the total market average even in the overall bear Western European market environment while others fail to do so. It shows that one formula for success includes deliberately exploiting market imperfections und overcoming inefficient information policies.

Keywords

Citation

Frehse, J. (2007), "Private equity hotel investments", Tourism Review, Vol. 62 No. 1, pp. 6-13. https://doi.org/10.1108/16605370780000157

Publisher

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Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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